GRAY v. CONESTOGA TITLE COMPANY et al
Filing
65
ORDER - The Court GRANTS the following motions: Chase Home Finance LLC's motion to dismiss, dkt. 40 ; Safeguard's motion to dismiss, dkt. 48 ; and Citibank's motion to dismiss, dkt. 56 . All are dismissed with prejudice. The Cou rt GRANTS IN PART American Modern Insurance Group's ("American Modern") motion to dismiss, dkt. 20 ; and Conestoga Title Company's motion to dismiss, dkt. 34 . The Court DENIES AS MOOT American Modern's Motion to Strike. Dkt. 44 . The Court DENIES IN PART Mr. Gray's motion for leave to amend supporting documentation, dkt. 46 . The Court DENIES Gray's motion to strike the Defendants' motions to dismiss, dkt. 51 , because the Defendants are not in d efault, as Mr. Gray claims and because the other arguments that he raises do not impact the claims that the Court has resolved in this action. Final judgment will now issue. (SEE ORDER). Signed by Judge Jane Magnus-Stinson on 6/5/2012. (copy to Dwayne Gray via US Mail) (JKS)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
DWAYNE E. GRAY,
Plaintiff,
vs.
CONESTOGA TITLE COMPANY; AMERICAN
MODERN INSURANCE GROUP; CHASE HOME
FINANCE, LLC; SAFEGUARD PROPERTIES,
LLC; JT PROPERTY SERVICES; and CITIBANK,
Defendants.
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1:11-cv-01575-JMS-DKL
ORDER
Pro se Plaintiff Dwayne E. Gray has filed a Complaint alleging federal claims under 42
U.S.C. § 1983; the Truth-in-Lending Act, 15 U.S.C. § 1601 et seq.; and under several state-law
theories: “illegal entry and property damage, breach of contract, negligence, fraud, illegal affidavit of default, robo-signing slander of title, [and] bad faith.” [Dkt. 1 at 3.] Mr. Gray’s Complaint asserts each of the claims against all of the Defendants. The Court has already dismissed
Mr. Gray’s claims against JT Property Services. [Dkt. 64.] The remaining Defendants have
filed motions to dismiss, too. [Dkts. 20; 34; 40; 48; 56.]
STANDARD OF REVIEW
When reviewing a motion to dismiss, the Court accepts as true all non-conclusory allegations in the Complaint and draws all reasonable inferences from them in favor of the non-moving
party, here Mr. Gray. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1965
(2007). Additionally, given Mr. Gray’s pro-se status, the Court must take an especially liberal
view of the allegations in the Complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (“A document filed pro se is to be liberally construed, and a pro se complaint, however inartfully pleaded,
must be held to less stringent standards than formal pleadings drafted by lawyers.” (quotations
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and citations omitted)). The Court can also take judicial notice of matters of public record. See,
e.g., Henson v. CSC Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994). The Court must dismiss the
Complaint if the allegations, inferences, and matters of judicial notice show that the Complaint
“fail[s] to state a claim upon which relief can be granted.” Fed. R. Civ. Pro. 12(b)(6).
BACKGROUND
A. Allegations in the Complaint
Mr. Gray describes the background of his case as follows (using normal capitalization
and omitting emphasis):
The lawsuit and the evidence will clearly show that the Chase Home Finance LL, Citibank, American Modern Insurance Group, Conestoga Title Insurance and JT Properties Services used predatory lending practices, illegal entry and
property damage, breach of contract, negligence, fraud, illegal affidavit of default,
robo-signing, slander of title, bad faith and all against federal guidelines.
[Dkt. 1 at 3.]
Mr. Gray then provides the following factual summary of his claims:
On or about May 24, 2002 Plaintiff Dwayne E. Gray executed a promissory note with Chase Home Finance LLC. On August 2, 2005 Citi Bank acting as
Chase’[s] loan server filed a motion to foreclose on the property due to Gray’s
failure to pay Citi Bank in accordance with the terms of the promissory note. Upon receiving the foreclosure papers, Mr. Gray notice[d] a number of deficiencies
by Chase and Citibank. For instance, Mr. Gray was in full compliance with the
loan[;] however Citibank tried to force a default by saying that they never received payment even though Mr. Gray had receipts proving that he had sent his
payment. Next, the foreclosure papers had a number of liens on the property in
which Chase had been paid over six (6) hundred dollars (May 24, 2002) for title
insurance to Conestoga Title Company who admitted that they had never received
the money (March 29, 2006). On or about August 13, 2005 Chase Home Finance
LLC paid a total of $5,267.00 to American Modern Insurance Group, then called
American Modern Insurance for coverage to protect the interest of Mr. Gray’s
house. However, when Mr. Gray’s house was vandalized Mr. Gray filed claim[,]
in which claim was never paid by American Modern Insurance Group. Mr. Gray
did in fact request a copy of said policy from American Modern Insurance Group,
and they did in fact send it to him; in which he was clearly covered with a
$500.00 dollar deductible. Wherefore Mr. Gray’s policy should have been paid in
full to his person.
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On June 24, 2008 the Honorable Frank J. Otte found pertinent issues and
ordered motion to file suit against Conestoga Title company and American Modern Insurance Group; Chase and Citi Bank who charged over $5,267.00 for hazard
insurance.
Claim II: New evidence now exist[s] that Safeguard and JT Properties
were directly involved with Chase Home Finance and violated Mr. Gray’s due
process rights.
[Dkt. 1 at 4.]
On the pro-se complaint form that the Court provided, Mr. Gray indicated that he had
filed a state-court action dealing with the “same facts” and “all issues” involved as his claim
here. [Id. at 5.] He indicated that “part one” of his action (involving Defendant Safeguard Properties, LLC) was appealed to the Indiana Court of Appeals, and summary judgment against Mr.
Gray was affirmed [Id.] But, he says, “new evidence exist[s] under said cause and a violation of
federal law has been established” and “part two” of the action remains pending in the state trial
court. [Id.]
B. Items Subject to Judicial Notice
The decision from the Indiana Court of Appeals that Mr. Gray mentioned is available as
Gray v. Safeguard Real Estate Props., 2011 Ind. App. Unpub. LEXIS 1313 (Ind. Ct. App. September 19, 2011). In that decision, the Court of Appeals affirmed summary judgment in favor of
Safeguard Real Estate Properties d/b/a Safeguard Properties, LLC (“Safeguard”). According to
the opinion, Mr. Gray sued Safeguard for “illegal entry and property damage” that resulted to his
home while it was in foreclosure. Id. at *2.
DISCUSSION
The Court will first consider Mr. Gray’s federal claims before turning to his state-law
claims.
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A. Federal Claims
Although Mr. Gray has asserted two federal claims against all Defendants in this action,
neither states a claim upon which relief can be granted.
As for the claim under § 1983, it “requires a showing that the plaintiff was deprived of a
right secured by the Constitution or federal law, by a person acting under color of law.” Thurman v. Village of Homewood, 446 F.3d 682, 687 (7th Cir. 2006). Where, as here, the defendants
are private entities rather than governmental actors, a plaintiff can only satisfy the color-of-law
requirement “if the plaintiff can establish that (1) the private individual and a state official
reached an understanding to deprive the plaintiff of her constitutional rights and (2) the private
individual was a willful participant in joint activity with the state or its agents.” Id. (quotation
omitted). Because Mr. Gray does not allege that any state actor was even remotely involved in
the harms he claims to have suffered, and because none of the Defendants are state actors, he
cannot sue under § 1983.
Turning to Mr. Gray’s claim under the Truth-in-Lending Act, it has several requirements. Critically, the Act requires (with exceptions not relevant here) a plaintiff wishing to sue
for damages to file an action “within one year from the date of the occurrence of the violation.”
15 U.S.C. § 1640(e). The one-year clock begins at closing. See Nash v. First Fin. Sav. & Loan
Asso., 703 F.2d 233, 239 (7th Cir. 1983) (“The violation of the Act is not simply the inaccurate
disclosure; it is the consummation of the new transaction without having made the required disclosure.”).1 Because Mr. Gray clearly alleges that he executed his promissory note in 2002, this
action filed in 2011 comes too late to qualify under the Truth in Lending Act, meaning that Mr.
1
A plaintiff seeking rescission can, depending on the circumstances, wait for up to three years
after the closing. 15 U.S.C. § 1635(f). Mr. Gray seeks only damages, [dkt. 1 at 7], and, in any
event, has waited more than three years to file this action.
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Gray has effectively “pleaded him[self] out of court.” As a consequence, a dismissal under Rule
12(b)(6) is appropriate. Lekas v. Briley, 405 F.3d 602, 603 (7th Cir. 2005). And because under the facts that he has already pleaded, any amendment would be futile, no leave to amend will
be given. Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 943 (7th Cir. 2012) (“[A]
district court may refuse leave to amend where amendment would be futile.” (citation omitted)).
B. State-Law Claims
Mr. Gray has also raised state-law claims against the Defendants. Normally where, as
here, the Court has resolved all federal claims before trial (and there is no basis in the record to
invoke diversity jurisdiction) the Court should dismiss remaining state-law claims without prejudice to the parties’ ability to litigate them in state court. See, e.g., Groce v. Eli Lilly, 193 F.3d
496, 501 (7th Cir. 1999).
That normal rule is, however, inappropriate for Mr. Gray’s state-law claims against Safeguard. Mr. Gray has already sued Safeguard once admittedly over the same “facts” and “issues”
that he raises here. [Dkt. 1 at 5.] He was unsuccessful in that previous suit, resulting in a judgment in Safeguard’s favor that was affirmed by the Court of Appeals. A person may not file suit
again over the same facts litigated in an earlier lawsuit. See Wallace v. State, 820 N.E.2d 1261,
1263 (Ind. 2005) (“The doctrine of res judicata prevents the repetitious litigation of claims that,
like Wallace’s, have already been decided.” (citations omitted)). This Court must respect the
judgments issued in state court. 28 U.S.C. § 1738 (requiring federal courts to give “full faith and
credit” to judgments issued by state courts). Res judicata would also preclude any attempt to
present a new claim against Safeguard arising from those facts because res judicata covers claims
that were not only actually brought, but also those that “could have been brought” regarding the
same dispute. Huber v. United Farm Family Mut. Ins. Co., 856 N.E.2d 713, 716 (Ind. Ct. App.
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2006) (citations omitted). See also Kubsch v. State, 934 N.E.2d 1138, 1144 n.2 (Ind. 2010) (applying res judicata even though the litigant claimed to have “additional evidence” not presented
previously). A party has a responsibility to raise all potential claims in one proceeding.
The state of the record regarding the remaining Defendants is not sufficient to overcome
the normal rule that the Court should permit the state courts to handle any further litigation in
this action. Mr. Gray asserts that litigation is already pending in state court against those Defendants, so these remaining claims may already have a home. The Court will, therefore, leave
those matters in the capable hands of the state trial judge.
CONCLUSION
The Court GRANTS the following motions: Chase Home Finance LLC’s motion to
dismiss, [dkt. 40]; Safeguard’s motion to dismiss, [dkt. 48]; and Citibank’s motion to dismiss,
[dkt. 56]. All are dismissed with prejudice.
The Court GRANTS IN PART American Modern Insurance Group’s (“American Modern”) motion to dismiss, [dkt. 20]; and Conestoga Title Company’s motion to dismiss, [dkt. 34].
The motions are granted with prejudice as to the federal claims that Mr. Gray has raised. The
Court does, however, dismiss without prejudice his state-law claims, as permitted under 28
U.S.C. § 1367.
The Court DENIES AS MOOT American Modern’s Motion to Strike. [Dkt. 44.]
The Court DENIES IN PART Mr. Gray’s motion for leave to amend supporting documentation, [dkt. 46]. It is denied to the extent, if any, that the motion relates to the claims that
the Court has resolved in this order; any amendment on these claims is futile. To the extent that
the motion relates to state-law claims that survive this Order, the Court makes no ruling on it.
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The Court DENIES Gray’s motion to strike the Defendants’ motions to dismiss, [dkt.
51], because the Defendants are not in default, as Mr. Gray claims and because the other arguments that he raises do not impact the claims that the Court has resolved in this action.
Final judgment will now issue.
06/05/2012
_______________________________
Hon. Jane Magnus-Stinson, Judge
United States District Court
Southern District of Indiana
Distribution via U.S. Mail:
DWAYNE E. GRAY
5567 West 43rd Street
Indianapolis, IN 46254
Distribution via ECF only:
Elizabeth J. Wysong Berg
GOODIN ABERNATHY LLP
eberg@goodinabernathy.com
Matthew W. Conrad
GEIGER CONRAD & HEAD LLP
matt.conrad@gch-law.com
Oni N. Harton
BOSE MCKINNEY & EVANS, LLP
oharton@boselaw.com
Deborah A. Kapitan
KOPKA PINKUS DOLIN & EADS LLC
dakapitan@kopkalaw.com
Richard M. Malad
COHEN & MALAD LLP
rmalad@cohenandmalad.com
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Theodore J. Nowacki
BOSE MCKINNEY & EVANS, LLP
tnowacki@boselaw.com
Matthew D Snyder
KOPKA PINKUS DOLIN & EADS PC
mdsnyder@kopkalaw.com
TaKeena Monette Thompson
COHEN & MALAD, LLP
tthompson@cohenandmalad.com
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